This whole Miliband V Daily Fail kerfuffle....

What the French have is a private entity of which the French government own a vast proportion but which operates in an (allegedly) competitive environment.

You really are clutching at straws. You are making pedantic points about legal status, I'm talking about the actually reality. And the actually reality is that EDF, its prices, and its profits, are very firmly in the hands of the French government.

That is why the French government can dictate to the "state-controlled power utility" that it increases its electricity prices to French consumers at half the rate of price increases to UK consumers :

The French government has authorized French state-controlled power utility Electricite de France (EDF.FR) to raise its electricity price for residential consumers by 5% next month, and by the same proportion in August next year, to take into account recent increases of the company's production costs.

JY - perfectly fair cop and a genuine mistake on my part. Having lived north of the border ( :wink:) I am normally sensitive to the issue and try not to equate England with Britain, even if I find the treatment and level of angst absurd/humorous.

E_L you forgot the bit about allowing prices to exceed the cost of production in France. A small triffle that Ed and Chukka managed to overlook as well.

Energy companies are currently trying to pressurise the government to subsidise gas storage. They claim not to be able to maintain the supply of energy without government money. And the energy market already enjoys lots of tax breaks to keep it ticking along, because, once again, the energy companies claim not to be able to supply us without those tax breaks.

E_L you forgot the bit about allowing prices to exceed the cost of production in France.

Well I can't help it if you don't bother clicking the link that I provide.

What do you want me to do ......copy and paste the entire article for you ?

OK

PARIS--The French government has authorized French state-controlled power utility Electricite de France (EDF.FR) to raise its electricity price for residential consumers by 5% next month, and by the same proportion in August next year, to take into account recent increases of the company's production costs.

A recent report written by the electricity regulator showed retail prices charged by EDF didn't cover its costs and recommended an increase of between 8.6% and 9.6% to cover the shortfall, the country's energy ministry said late Monday in a statement.

"The government decided to spread out over several years the price increase needed to cover EDF costs to protect households' spending power," the statement said.

The French government last year decided to cap regulated tariff increases at 2% a year, to help protect households as much as possible. However, the regulator recommended last month raising power tariffs between 6.8% and 9.6% as soon as this summer and then by 3.2% in both 2014 and 2015.

The government's decision to speed up increases highlights the difficulty of finding a balance between the conflicting goals of protecting households and maintaining EDF as an economically viable company, at a time when the euro-zone's second largest economy is in recession, unemployment is at record highs and the government is struggling to keep public finances under control.

Over recent years, costs faced by EDF, which is the world's largest nuclear operator, have risen mainly because of additional investments imposed on the company's nuclear power plants to increase safety standards. The energy ministry said the increases for this year and next are steep as the previous administration underestimated EDF's rising costs.

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EDIT : You will note the difference between EDF's operations in France and EDF's operations in the UK.

In France, EDF has "the difficulty of finding a balance between the conflicting goals of protecting households and maintaining EDF as an economically viable company". In the UK, EDF just needs to maximize its profits.

Sorry Ernie, I wasn't clear - I knew exactly what the rest of the article said (but thanks!), just wondering why you chose to miss the most important bit out?!? But as the penultimate para shows - it is a great example - the French case shows perfectly why Ed's proposal at best needs a lot more thinking and a worst, is simply "populist" ( ) BS. The closest contemporary example doesn't work!!!

ernie_lynch - Member
You are making pedantic points about legal status, I'm talking about the actually reality.

.....

You will note the difference between EDF's operations in France and EDF's operations in the UK.

EDF Energy is 100% owned by EDF SA...and the reality....is not a good model for the UK market.

So you're choosing to ignore the difference between EDF's operations in France and EDF's operations in the UK.

Fair enough, the fact that EDF's operations in France involves finding a balance between the conflicting goals of protecting households and maintaining EDF as an economically viable company, and EDF's operations in the UK simply involves making a nice fat profit, must be very awkward for you. So you just ignore it

ernie_lynch - Member
So you're choosing to ignore the difference between EDF's operations in France and EDF's operations in the UK.

C'mon Ernie - be serious. Forget the Habana-style side step, this is what I am referring to....

ernie_lynch - Member
There is no reason to believe that the performance of a British (!) state owned EDF would be any different to that os a French state owned EDF

Exactly - hard to prove this is economically viable solution for the UK - exactly the point Paxman put to Ummana. Dont worry he didn't answer the point either.

Should a utility company that is required to invest in the future of our energy infrastructure be allowed to make a profit - absolutely yes - 100%.

If it enjoys a natural monopoly, does this still need a form or regulation - yes 100%. But as you now that is a separate point altogether but a worthy side step nonetheless!!

But if we want to explore tangents EDF's trails re UK energy are actually far more important IMO. Good article in the Sun Torygraph on that opposite the more important one (see the NHS thread) article by Liam Halligan on why we should stop lying about the deficit.

Billions of pounds of taxpayers money could be secretly funnelled to the French state nuclear company Edf to underwrite the cost of its proposed new power station at Hinkley Point in Somerset, it emerged today.

The energy bill has quietly granted energy secretary Ed Davey the power to keep contract details of the crucial Hinkley Point C project a secret if he decides it is commercially sensitive to disclose them, an analysis of the bill has revealed.

Experts condemned the provision, saying it paves the way for the government to write a cheque for billions of dollars to cover the cost of budget over-runs or building delays at Hinkley Point, without the public or parliament ever finding out.

The power came to light three months after energy minister John Hayes hinted that he was considering breaking with government tradition and underwriting the construction costs of new nuclear plants.

Dr Robert Gross, director of Imperial College’s centre for energy policy and technology, said: “If the government writes a contract that allows cost escalations to translate into subsidy increases then it is effectively writing a blank cheque signed on behalf of bill payers.”

EDIT : OK I know you're going to pedantic and pull me up on it so yes, EDF is also going to invest, but the UK government's underwriting plus the strike price will take away all the risks for EDF, and it's the alleged risks which are always used to justify obscenely high profits. And Hinkley Point will of course overrun, it already has.

Nationalise the loses and privatise the profit is the rule, or in the case of EDF hand over the profit to the French gov.

I wasn't being specific to edf in that case. But the nuclear issue is v interesting but Hinkley's contracts for difference is probably a bit too tangential even for us!!!

Edit for the edit - actually to square the ciclo fully and end on a pleasant note, in this case the EDF example is a good one. A real life example of seeing if public-private initiatives can work in power and if the lessons of Flamanville have been learned!!!

If they're saying they'll underwrite cost overruns that are as a result of delay or additional expenses caused by something the government have control over, such as future changes in legislation or govt policy that causes delay - then thats probably a fair concession to make.

Whereas if they're talking about cost overrun due to the contractors own delays then its a different thing.

I work for an electricity distribution company where I would contend that regulated privatisation has been a success on the basis of lower prices, better service and better safety as I mentioned earlier. Yes we make a profit, but our owner chooses to reinvest that in the company and it's UK infrastructure - we do not pay a dividend. We do not receive any subsidy from the state. We do pay UK taxes - and quite a sizeable amount given the size of our operation.

We are distinct from the energy supply companies where regulation has been far lighter. I just switched my energy supplier from nod that claims only to make 5% profit to one that (based on last year's consumption) should be 10% cheaper - inside of them to donated their entire profit to me and give me a little extra for my trouble. I'll let you decide whether I think the energy supply market is truly competitive, or perhaps in need of a little more regulation.